Corporate governance and regulation: Can there be too much of a good thing?

Valentina Bruno and Stijn Claessens ()

Journal of Financial Intermediation, 2010, vol. 19, issue 4, 461-482

Abstract: We investigate how company-level corporate governance practices and country-level legal investor protection jointly affect company performance. We find that in any legal regime there are a few specific governance practices that improve performance. Companies with good governance practices operating in stringent legal environments, however, show a valuation discount relative to similar companies operating in flexible legal environments. At the same time, a stronger country-level regime does not reduce the valuation discount of companies with weak governance practices. Our analysis suggests a threshold level of country development above which stringent regulation hurts the performance of well governed companies or has a neutral effect for poorly governed companies.

Keywords: Corporate; governance; Country; regulation; Company; valuation; Cost; of; capital (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (74)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1042-9573(09)00052-7
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Corporate Governance and Regulation: Can There Be Too Much of a Good Thing? (2007)
Working Paper: Corporate governance and regulation: can there be too much of a good thing ? (2007)
Working Paper: Corporate governance and regulation: can there be too much of a good thing? (2006)
Working Paper: Corporate Governance and Regulation: Can There Be Too Much of a Good Thing? (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinin:v:19:y:2010:i:4:p:461-482

Access Statistics for this article

Journal of Financial Intermediation is currently edited by Elu von Thadden

More articles in Journal of Financial Intermediation from Elsevier
Bibliographic data for series maintained by Catherine Liu ().